We need national publicly owned transportation, not bailouts for private carriers
Updated: Oct 5
Union leaders in Canada are calling for massive government corporate bailouts in aviation with no mention at all of nationalization. This is a mistake.
After months of the economic and social impact of the capitalist coronavirus crisis few sectors have been impacted to the degree that transit and transportation have. For bus, commuter train and airline companies in North America the impact has been nothing short of catastrophic.
The fundamental issues with the private transportation model were already becoming clear when Greyhound shut down virtually all its bus routes in western Canada in 2018. From a business point-of-view it was a decision that made perfect sense. The bulk of these routes were not profitable. From a community point-of-view the consequences were dire.
As I noted at the time private businesses exist to make a profit, not to deliver a social need or service. Should the delivery of social needs and services make a profit then private enterprises will be happy to maintain them. As soon as they don't, this is what happens.
The concept of intercity public transit or transportation networks is one that governments in North America have almost entirely abandoned for decades now. Many previously existing intercity public transit or transportation networks or companies were discontinued and/or privatized.
If they have not been privatized they operate based on private sector profitability models as opposed to as a public service. We see in this in examples like Ontario Northland, a government owned bus service in the province that has exorbitant rates entirely comparable to private sector carriers and that cut an essential northern Ontario train service in 2012 as it was not making money.
With the pandemic and the capitalist coronavirus crisis Greyhound has suspended all of its Canadian routes since May. How many will ever return is anyone's guess, but likely most will not.
Meanwhile, the Canadian aviation industry has been devastated.
According to a Unifor press release on October 1:
The COVID-19 pandemic has created an unprecedented crisis in Canada’s aviation industry. It has led airlines to adopt drastic survival measures to deal with a drop in demand and international and inter- provincial restrictions – and recovery may be years away. Many businesses supporting the sector have faced closure. Airlines and airports have laid off or furloughed highly skilled and extensively trained workers; at two airlines alone (Air Canada and WestJet), some 30,000 skilled employees have lost their jobs. It is a devastating blow for a sector that previously employed roughly 240,000 workers and contributed nearly $37 billion in Canada’s Gross Domestic Product (GDP).
This led Jerry Dias, National President of Unifor, Robert Giguere, Chief Executive Officer of the Air Canada Pilots Association (ACPA) and Tim Perry, Canadian President of the Air Line Pilots Association (ALPA) to call on "the Canadian and provincial governments to take immediate steps to provide direct, financial support to the sector and approve rapid testing."
The leaders are demanding $7 billion of direct financial support and "calling on the government to support the science-based approval and deployment of rapid tests for COVID-19 to facilitate the eventual safe return to travel."
This would be a massive infusion of corporate welfare. Understandably they want to defend the jobs of their members, but history has shown that massive bailouts for private companies do not do that. Once their finances have stabilized, regardless of any promises or rhetoric, private companies will shut down routes, services, factories, etc. anyway seizing the opportunity to "rationalize", outsource or whatever else they can do to maximize profit.
This is exactly what is happening in the United States right now. As Genevieve Leigh noted on the World Socialist Web Site on October 2:
On Thursday, some 50,000 airline workers were laid off or furloughed. Having received tens of billions of dollars in government handouts and virtually free credit from the Federal Reserve Board, compliments of the bipartisan CARES Act passed last March, major US airlines and defense contractor Boeing are carrying out mass layoffs.
The unprecedented corporate bailout was cynically packaged as a move to “save jobs.” But the billionaire bankers, investors and CEOs have used the money to permanently downsize and restructure their operations while further enriching themselves and boosting their stock prices. They destroy the jobs—and the lives—of their workers with complete impunity, knowing they will face no opposition from either of the two big business parties or the pro-corporate trade unions.
American Airlines CEO Doug Parker is leading the industry attack, announcing Wednesday that his airline will go ahead with 19,000 layoffs, or 14 percent of its pre-pandemic workforce. American received $5.81 billion through the CARES Act. Parker took in $12 million in compensation in 2018.
United Airlines is following suit, announcing that workers should expect about 13,000 furloughs in the coming weeks.
Delta, which received $5.4 billion in grants and low-interest loans from the government, started the year with over 90,000 workers and now employs fewer than 75,000. The airline plans to furlough roughly 1,900 pilots. Delta CEO Ed Bastian received a total compensation package of nearly $15 million in 2018.
Notably, one thing the union leaders in Canada do not do anywhere is call for nationalization.
Going back to the press release it states:
The aviation sector is critical not just for its workers but for the Canadian economy and all Canadians – during the pandemic and beyond. The sector is an essential engine of national and international trade, ensuring that Canadian goods, services and expertise continue to get to market, and in turn ensuring Canadians have access to the goods, services and expertise required. Aviation workers contribute essential services that support the entire Canadian economy, including business, tourism, and cargo.
“The aviation sector is part of Canada’s national strategic infrastructure. Airlines and airports are essential not just to the Canadian economy – but to the Canadian communities that rely on them,” added Tim Perry, President of ALPA Canada.
If this is true clearly the sector cannot be left entirely in private hands.
The only way to ensure that the communities that rely on these services and routes continue to receive them is to nationalize at least one major airline and to run it as a democratically managed service for Canadians and not for profit. By including workers in the management of such a public corporation jobs would also be further guaranteed.
Otherwise handing the major aviation companies $7 billion is a recipe for the kind of betrayal that has been dished out time and again by profit driven corporations that take the public's money and run, communities, services and jobs be damned.
There were publicly owned transportation services in Canada in the past, such as Air Canada and CN rail, that were incredibly important in the building of national transportation infrastructure. These kinds of companies exist now in many other countries. They can absolutely be nationalized and built again here and now too.
This is not just critical in aviation but in the rail and bus sectors as well. Handouts to private companies are no substitute for public ownership.